IV. Economics and Other Social Sciences A. Three Economic Questions 1. Economics is the study of how people manage their limited resources to satisfy their wants and needs. 2. What goods and services should we produce? a) 1st economic task: food, shelter, and clothing. b) After that, the society must make choices about how to use the rest of its limited resources. 3. How should we produce goods and services? a) People must choose how to produce goods and services and how much to produce.

IV. Economics and Other Social Sciences b) Technology plays a major role in these decisions. c) Advances in technology also changes manufacturing. 4. For whom should we produce goods and services? a) Consumers are users of goods and services. b) Just as resources are limited, supplies of goods and services are limited c) We live in a cash economy, that is, an economy where we exchange money for goods and services. d) How to supply basic needs to people who cannot afford to buy them is a difficult issue for governments, charities, religious communities, and individuals.

IV. Economics and Other Social Sciences B. The American Free Enterprise System 1. In a free enterprise system, the government plays a limited role in the economy. a) Businesses are owned by private citizens. b) Owners decide what products to make, how much to produce, where to sell products, and what prices to charge. c) Competition is encouraged because it gives a reason for businesses to work harder. d) Companies compete for consumers by making the best product at the lowest price. 2. Provisions for private property and competition are included in the U.S. Constitution.

IV. Economics and Other Social Sciences a) Until the late 1800s, the United States government did relatively little to control the economy. b) Since then the government has instituted regulations to prevent abuse and ensure against economic collapse. 3. The free enterprise system allows consumers freedom to make economic choices. a) Through their buying decisions, consumers can tell businesses what to make, how much, and at what price. C. Other Social Sciences 1. The social sciences include: economics, history, geography, political science, anthropology, and sociology.

IV. Economics and Other Social Sciences a) We focus on history, geography, political science, and economics. 2. Political Science is the study of government. a) Ideas behind different governments, organization, and how government works. b) The basic principles of our government are contained in the U.S. Constitution and the Pennsylvania state constitution. c) An important branch of political science is civics, the study of the rights and responsibilities of citizens. 3. Anthropology is the study of how people and cultures develop.

IV. Economics and Other Social Sciences 4. Sociology is the study of how people behave in groups. a) Psychology is the study of how people think and behave .